This week the Office of Fair Trading revealed that complaints about payday lenders, who charge up to 400% interest on short-term loans, have more than doubled this year.

Now the Church of England, which has investments worth over £8bn, has decided to extend its ban on investing in doorstep lending to cover the booming online payday loan industry.

A Church spokesman said: "The policy draws on Christian theology on the need for the greatest care to ensure that lending to poorer members of society is not exploitative."

James Featherby, chair of the Church's Ethical Investment Advisory Group, said it "acknowledges the importance of access to credit for all members of society. But it is not prepared to sanction investment by the Church's investing bodies in companies charging triple-digit interest rates to some of the most vulnerable customers of the financial services industry.

"The Ethical Investment Advisory Group urges companies involved in the provision of short-term unsecured lending to vulnerable borrowers to do all they possibly can to ensure that their business models keep interest rates as low as possible and that their loans are appropriate for customers' circumstances.

"We call on mainstream banks to continue to work to make basic banking available to all and to help basic banking customers graduate to mainstream financial services."

He also called on banks "who have benefited from the generosity of society to be generous themselves in their provision of finance to credit unions and community finance development institutions who work so hard to meet the financial needs of vulnerable customers at appropriate rates of interest".

We're not aware of the Church having invested in payday firms but advisors were worried that the industry is increasingly run by multinationals. Specifically, they were concerned that fund managers acting for the church might invest in American payday lenders who are targeting UK households as we have no restrictions on what they can charge.

The Office of Fair Trading last week revealed that complaints about payday lending had rocketed from 700 last year to 1,535 in the first 11 months of this year.

It announced a crackdown and said: "In light of our significant concerns about the market, we are tightening our approach to the scrutiny of new applications and renewals for the sector, alongside a programme of investigatory and enforcement action."

It is feared that 3.5m people will turn to payday lenders in the next six months but research shows that nearly two-thirds will regret the decision.

Many will be unable to pay off the loan and risk becoming "zombie debtors", only able to pay off the interest on what they owe.

Labour MP Stella Creasy, who is leading the campaign for curbs on payday lenders, said: "This move will hit these high cost lenders in the pocket where it hurts, in the same way they're hitting the most desperate people in our society.

"It sends a strong message about the widespread public concern about the way these firms operate and the need for the Government to act."

Alan Thornton, of Church Action on Poverty, said: "Ten years ago we lobbied the Church of England to sell their £12 million pound investment in the biggest legal loan shark, Provident Financial and stop investing in other doorstep lenders.

"We are pleased that they've recognised it is wrong to profit from investment in other legal loan sharks, like payday lenders."

Barry - what is the point of your comment?? If the Church (or curch as you so eloquently put it) has the right to its opinions then so does Jared. You yourself point this out yet still feel it necessary to make a comment and request that he 'wind his neck in' and not the Church as well...

I would argue that Jared has more rights to speak freely, what with him being a tax payer and all. I think it would be better if your neck was wound in until you had something to add to the discussion or at the very least something intelligent to say.

About the blog

Andrew Penman and Nick Sommerlad form the Daily Mirror's Investigations team. They write a weekly column in the Mirror every Thursday and they're here to help uncover the scams, and expose the people behind them. They won the Cudlipp Award for campaigning popular journalism at the 2010 British Press Awards.